Zee Entertainment Enterprises Limited (“ZEEL”) (earlier known as Zee Telefilms Limited) is the flagship company of the Zee group and is India's first largest vertically integrated media and Entertainment Company having various.
ZEEL, Siti Cable Network Limited (‘Siti Cable’), (post demerger of their Cable businesses) along with Integrated Subscriber Management Services Limited (‘ISML’) and New Era Entertainment Network Limited (‘NEENL’) were engaged in the Direct Consumer Services Business (‘DCS Business’), which is providing services to the Direct to Home platform.
Dish TV is engaged in the Direct-to-Home ('DTH') broadcasting business comprising of distribution / uplinking of satellite based television / radio signals, constituting Channels, pursuant to a DTH license issued by the Government of India, Ministry of Information & Broadcasting. The DCS Business carried on by ZEEL directly and/or through its subsidiaries / group companies, has significant potential for growth.
The nature of technology, risk and competition involved in DCS Business is distinct from other businesses carried on by ZEEL and, in fact, rapidly divergent. The DCS Business is capable of addressing independent business opportunities, deploying different technologies and attracting different sets of investors, strategic partners, lenders and other stakeholders.
The management of the Group has considered it appropriate to de-merge the Direct Consumer Services Business Undertaking of ZEEL into Dish TV and merger of Siti Cable and NEENL with Dish TV. The segregation enables cost savings, optimum utilization of available resources which will enhance the management focus thereby increasing the shareholder’s value.
The Appointed Date for the Scheme was April 1, 2006. Upon the Scheme becoming effective the entire Direct Consumer Services Business Undertaking has been transferred to Dish TV India Ltd.
On De-merger, the shareholders of ZEEL were entitled for 23 fully paid up equity shares of Re.1 each of Dish TV India Ltd. for every 10 equity shares of Re 1 each held by them in ZEEL.
Upon the Scheme becoming effective, the fully paid-up equity share capital of Dish TV India Ltd. after giving effect to the entitlement of shares were reduced by canceling 3 equity shares for every 4 equity shares held in Dish TV India Ltd, so as to have serviceable capital. After giving effect of entitlement of shares and reduction of capital, Dish TV India Ltd issued and allotted 5.75 fully paid equity share for every 10 equity share held in ZEEL as on the Record Date.
Pursuant to De-merger of DCS business undertaking of the Company into Dish TV India Ltd., Siti Cable and New Era become subsidiaries of Dish TV and as a part of this scheme, merged with Dish TV. Upon the merger of Siti Cable and New Era into Dish TV, the entire equity capital of Siti Cable and New Era stand automatically cancelled and there will be no issue and allotment of shares by Dish TV to the Shareholders of Siti Cable and New Era.
The Scheme of Arrangement, has been approved by the Hon’ble High Court of Bombay, vide its order dated January 12, 2007 and by the Hon’ble High Court of Delhi vide its order dated December 18, 2006.
No coupons had been issued in respect of fractional entitlements, by Dish TV, to the members of ZEEL at the time of issue and allotment of Equity Shares as above. The Board of Directors of Dish TV consolidated all fractional entitlements, arising due to the de-merger of the DCS Business Undertaking and allotted Equity Shares in lieu thereof to a director, who held the Equity Shares issued in Dish TV, in trust on behalf of the members entitled to fractional entitlements. Later on these shares were sold in the market and the net sale proceeds were distributed, subject to taxes, to the members in proportion to their respective fractional entitlements.
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